California Seeks Jail Time for 'Tax Lady' Roni Deutch

A former reporter and bureau chief for broadcast outlets and magazines, Truman Lewis has covered presidential campaigns, state politics and stories ranging from organized crime to environmental protection.
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California's attorney general has
asked a judge to imprison "Tax Lady" Roni Deutch for shredding
millions of pages of documents in violation of a court order. The
state claims Deutch began shredding the day after a court ordered
her not to destroy evidence in a $34 million lawsuit that accused her of
swindling tax clients.

The lawsuit was filed last August and charged
Deutch with engaging in "a heartless scheme that swindled people
with tax problems," according to then-Attorney General Edmund G.
Brown Jr. "She promises to significantly reduce their IRS tax
debts, but instead preys on their vulnerability, taking large
up-front payments but providing little or no help in lowering their
tax bills."

On Wednesday, Brown's successor, Kamala D.
Harris, filed an application in Superior Court asking that Deutch,
an attorney, be held in contempt, charging that she has repeatedly
violated the court's orders.

"Deutch is an officer of this Court
and a member of the Bar, which only serves to magnify the
seriousness of Deutch's violations of the Court's orders. If anyone
can be expected to respect and follow this Court's orders, it
should be those licensed to practice as attorneys before the Court.
The harm caused by Deutch's contempt is worthy of the most severe
sanction," Harris said in her court filing.

Harris noted that Deutch had been
ordered to "take reasonable steps to preserve every document" that
might have a bearing in the case. Instead, said Harris,
"the very next dayafter the [court issued the
order],Deutch conducted a purge of law firm documents that resulted
in the shredding of nearly 2,000 pounds of the firm's documents, or
about 200,000 pages."

"The millions of
pages that Deutch shredded while the document preservation order
was in effect are permanently destroyed because the shredding
company double shreds the documents and then bales them for resale
to the recycling industry.There is
absolutely no way for the People to know, much Jess recover, what
Deutch shredded," Harris charged.

No
refunds

Deutch also ignored a preliminary
injunction that requires her to return all unearned fees to clients
within 60 days" and admitted that she has over $400,000 in refund
requests that are older than 60 days, Harris said.

Even more disturbing, said Harris'
filing, is that Deutch allegedly gave at least $12,000 to her
brother, Scott Juceam, which he used to launch a tax debt
resolution company, called the Juceam Group, which he allegedly
runs from one of the Roni Deutch Tax Center locations.

Harris asked the court to fine
Deutch $1,000 and imprison her for five days for "each and every
separate contempt" -- $1,000 and five days in jail for each of the
millions of pages of documents destroyed and each refund not
issued, in other words.

Manufactured
credibility

Deutch manufactures credibility by
boasting that her tax resolution law firm, which has annual
revenues of at least $25 million, is the largest of its kind in the
nation. She spends $3 million a year on advertising, much of it on
late-night cable TV, and frequently offers tax advice on NBC's
Today Show, CNN, and CNBC, Brown's August lawsuit
charged.

Desperate debtors turn to Deutch based on her misleading ads
that feature fictional testimonials claiming she secured large
reductions in the featured clients' federal tax debts, Brown
said.

For example, her ad entitled "It's Your Turn" features three
clients whom Deutch claims to have "saved" from having to pay
thousands of dollars to the IRS. In fact, those clients still owe
the IRS the full amount of their taxes, plus interest and
penalties.

When potential clients call Deutch's boiler room,
sales agents employ high-pressure sales tactics plus a series of
misrepresentations and false promises to persuade them to retain
her firm, Brown charged. The sales agents claim Deutch's success
rate in dealing with the IRS is as high as 99 percent. But the
percentage of clients whose tax bills Deutch actually reduces is a
mere 10 percent.

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